Commissioner Of Income Tax Jaipur v. National Highway Authority Of India Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 75 / 2017 Commissioner Of Income Tax Jaipur ----Appellant Versus National Highway Authority Of India Ltd ----Respondent _____________________________________________________ For Appellant(s) : Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 21/04/2017 1.By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal preferred by the department. 2.Counsel for the department has framed the followingsubstantial question of law:- A. Whether in the facts and circumstances of the casethe ITAT has justified in law and has acted illegally andperversely in holding that the assessee is not liable formaking payment of TDS u/s 194C of the Act. B. Whether under the given facts and circumstancesthe contractual amount paid by the NHAI to itsconcessionary M/s GVK Jaipur Kishangarh ExpresswayPvt. In the name of “Grant”, is liable for tax deductionu/s 194C of the Income Tax Act, 1961 or not.” 3.The facts of the case are that The assessee has entered intoconcession agreements with these companies and the agreementis on Build Operate and Transfer (BOT) Model. As per theseagreements, NHAI has conveyed the concession to construct the Highways, operate and maintain them and collect Toll on theseHighways to the abovenamed Concessionaries. As per theseagreements, the concessionaries were to be given certain amountfor construction of roads by the NHAI. The AO observed that theassessee (NHAI) had not made TDS as per section 194 C of the ITAct, 1961 which appeared to be applicable in the instant case inrespect of the above concessionaries. The AO passed order u/s201 (1)/ 201(1A) on 18.03.2011 creating demand of Rs.6,56,58,200/- for AY 2006-07 for non deduction of TDS on thepayment of ‘ Contract Money’ to the concessionaries. 4.While considering the case, the Tribunal has observed asunder:- “We have gone through the terms of theagreement. The inference drawn by the AO is thatthe “Grant” is nothing but payment to the contractoris mis-placed. As per Section 194C, the payment isrequired to be made to the contractor but in thegiven case payment is not made to the contractor.The agreement cannot be stated to be purely acontract agreement but it is a contract agreement ofjoint venture. Hence, we do not see any infirmity inthe order of ld. CIT(A), therefore, the same is herebyupheld.” 5.In view of the concurrent finding of all the authorities below regarding payments in the nature of contribution in the jointventure, no interference is required in this appeal. 6.Hence, no substantial question of law arises. The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Brijesh 13.